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The Powerful Capabilities of AEP’s Dolan Labs

Thanks to the efforts of Chris Mather, co-head of the Tech Belt Energy Innovation Center, I was able to gain a tour of the Dolan Laboratories, located just outside Columbus, owned and operated by American Electric Power (NYSE:  AEP).

This facility is now highly unusual for the electric utility industry.  Back in the day, a few other utilities had their own laboratories to test the basic equipment upon which the power grid is based.  Alas, most of those laboratories have since been shut down or spun-out to private operators.  Indeed, now even the Electric Power Research Institute – the industry’s collective non-profit R&D organization – sometimes uses Dolan for their work.

The labs at Dolan include chemical and water testing facilities and civil engineering (especially related to concrete) capabilities that are mostly relevant for powerplants.  However, our tour was mainly focused on the Dolan Technology Center:  the set of facilities and equipment employed for testing assets downstream of generation, particularly transmission and distribution.

Electric power transmission and distribution lines look pretty benign, given the lack of moving parts.  However, the forces in (and around, and caused by) these cables are, well, shocking.

At Dolan, AEP has the ability to discharge 1.2 megavolts, which creates something not far removed from a lightning bolt.  In addition to electrical energy, the labs have physical equipment inside containment rooms that can impart extreme mechanical forces to push supporting items like conductors and mounts to their breaking points.  The resulting explosions unleash shrapnel much like a hand grenade.

Trust me:  do not try this at home.  I won’t get into any specifics, but the stories associated with working on grid infrastructure – usually when something is not right, often in difficult environmental conditions (night, rain, snow, wind, cold, heat) – are sobering.

A key function of Dolan is to quality check the supplies that AEP receives from its vendors before deploying to its grid, where failures harm service reliability, pose safety risks and are expensive to repair.

To illustrate, our host Bob Burns (Manager of the Dolan Technology Center) showed us how Dolan has been working to improve underground distribution cables.  Twenty years ago, due to the novelty of the technology, AEP rejected upon receipt about 5% of its underground cable purchases owing to unknown defects.   Dolan was able to identify the root causes of cable failure and work with manufacturers to dramatically reduce those failures by changing designs and production processes – with economic, reliability and safety benefits that redound not only to AEP but to the power industry at large.

In addition to its grid focus, the Dolan Technology Center also includes a number of end-use application testing facilities.  For instance, the main facility includes a dummy household kitchen containing a number of appliances (stoves, refrigerators, dishwashers, water heaters) and control systems, a spectrum of electric vehicle recharging stations, and various installations of advanced lighting and metering technologies.

Although we spent most of the tour indoors, outside were some other uncommon capabilities.  Down the road a half-mile was a former site of a small peaker powerplant, at which Dolan staff experiments with novel technologies relevant for microgrids, including grid-scale energy storage and small-scale distributed generation.  It was here that Dolan has been helping Echogen with their innovative waste heat recovery technology, and it is here that the Dolan is testing community energy storage approaches for AEP’s GridSmartOhio pilot program to be rolled out in suburban Columbus.

It should be noted that AEP contracts out Dolan’s equipment and staff to perform services on behalf of third-parties, and that they have ample spare capacity.  Facilities like this are not found in very many places.  It’s an asset that the cleantech community should capitalize upon more fully.  If you need some specialized technical help related to the power industry – especially in on high-voltage issues – and you’re not able to find a place to get work done, I’m sure the good folks at AEP’s Dolan Laboratories would be happy to take your call to see if they can fit the bill.

How About A Sane Energy Policy Mr. Obamney?

It’s Presidential Election year.  Ergo, time to discuss our 40 year whacked out excuse for an energy policy.  Royally botched up by every President since, umm?

Objectives:

Make US energy supply cheap for the US consumer and industry, fast growing and profitable for the American energy sector, clean, widely available and reliable, and secure, diversified, environmentally friendly and safe for all of us.

or

Cheap, Clean, Reliable, Secure, Energy

 

An Energy Policy that leaves us more efficient than our competitors

An Energy Policy that leaves us with more and more diversified, supply than our competitors

An Energy Policy that leaves us more reliable than our competitors

An Energy Policy that makes us healthier and cleaner than our competitors

An Energy Policy that makes us able to develop adopt new technologies faster than our competitors

An Energy Policy that makes it easy for industry to sell technology, energy, and raw materials to our competitors

An Energy Policy that keeps $ home.

A Sane Energy policy

 

Think more drilling, less regulation on supply, lower tariffs, more investment in R&D, tighter CAFE and energy efficiency standards, simpler and larger subsidies for new technologies, less regulation on infrastructure project development.

 

A couple of key action items:

  • Support the development of new marginal options for fuel supply, and support options that improve balance of payments, whether EVs ethanol, solar et al
  • Make crude oil, refined products, Gas, LNG and coal easy to import and export
  • Drive energy efficiency like a wedge deep in our economy
  • Support expansion and modernization of gas, electric, and transport infrastructure
  • Support long term R&D in both oil & gas, electric power, and renewables
  • Reduce time to develop and bring online new projects of any type (yes that means pipelines, solar and wind plants, offshore drilling, fracking and transmission lines).
  • Support policies and technology that enable  linking of energy markets
  • Challenge the OPEC cartel like we do EVERY OTHER cartel and break the back of our supply contraints
  • Support the export of our energy industry engineering, services and manufacturing  sectors overseas
  • Incorporate energy access into the core of our trade policy
  • Support deregulation of power markets
  • Support long term improvement in environmental and safety standards
  • Broadly support significant per unit market subsidies for alternatives like PV, wind, biofuels, fracking as they approach competitiveness

Or we could do it the other way:

  • Leave ourselves locked into single sources of supply in a screwy regulated market that involves sending massive checks to countries who’s governments don’t like us because that’s the way we did it in the 50s?
  • Keep massive direct subsidies to darling sectors so the darling sectors can fight each other to keep their subsidies instead of cutting costs?
  • Keep a mashup of state and federal regulatory, carbon and environmental standards making it virtually impossible to change infrastructure when new technology comes around?
  • Promote deregulation in Texas, and screw the consumer in every other market?
  • Every time there’s a crisis, we can shoot the industry messenger in the head, stop work, and subsidize something.
  • Continue the Cold War policy of appeasing OPEC so they can keep us under their thumb for another 30 years
  • And drop a few billion here and there on pet pork projects

Come on guys, stop the politics, let’s get something rational going.  Oh wait, it’s an election year.  Damn.

And in the meantime how about making energy taxes (a MASSIVE chunk of your gasoline and power prices) variable, so they go DOWN when prices go up.  Then at least the government’s pocket book has an incentive to control cost, even if they’re incompetent at putting together a policy that does so.

Report from Manitoba

In early August, at the invitation of the Government of Canada, the Chicago Council on Global Affairs (CCGA) organized a delegation of about a dozen energy executives from the Midwest U.S. to visit Canada to explore energy and environmental issues of common interest to the center of North America.  From my prior participation on a CCGA task force in 2009, which produced a report on the benefits to the Midwest from proactively participating in shaping energy/climate policy, I was lucky enough to be invited by the CCGA to join the group traveling to Canada.

Our first stop in Canada was Manitoba, where we focused on some of the more notable activities being undertaken by Manitoba Hydro, the provincial electric utility. 

We convened at Manitoba Hydro’s headquarters building, Manitoba Hydro Place, a two-year old 22-story gem in downtown Winnipeg.  The winner of several architectural awards, Manitoba Hydro Place is on a path to LEED Platinum certification, the highest standard of energy efficiency excellence.  The office tower has a number of fascinating heating, cooling and humidification/dehumidification concepts applied throughout in very fundamental ways that enable such a large building to be fully climate-controlled with only occasional reliance on a relatively small geothermal heat pump system, resulting in per-square-foot energy consumption levels about 20% the norm for buildings of this type.  This is especially impressive given the harsh climate that the building must face, with hot summers peaking at nearly 100 degrees Fahrenheit (35 degrees Celsius) and annual lows down to -35 degrees (in Celsius or Fahrenheit, it’s about the same). 

For a province with such abundant low-cost hydroelectric resources, one might wonder why Manitoba Hydro would emphasize energy efficiency not only at its own facilities, but also through a sizable demand-side management program rolled out to its customers.  In our briefing with the Premier (provincial minister), the genial and very-well-informed Greg Selinger, the overall energy strategy was made explicit:  Manitoba would like to more fully develop and export its immense run-of-river hydroelectric potential to the U.S. to serve the renewable energy markets there.  (Note that Manitoba drains about 20% of all of the precipitation that falls on the North American continent.)

So that we could see how vast this potential is, and how environmentally benign run-of-river hydro energy can be, we subsequently flew via small Perimeter Air turboprop to the northern Manitoba outpost of Gillam about 400 miles above Winnipeg, where we toured the 1200 megawatt Kettle Generating Station

Crucially unlike the Hoover Dam near Las Vegas or the Three Gorges Dam in China, Kettle didn’t displace habitats or populations by creating a massive new lake where one never existed.  True, some land was flooded as a result of Kettle’s construction, but let me assure you that the terrain and topography that was lost in the process is by no means scarce:  hundreds of thousands of square miles of virtually indistinguishable unpopulated territory stretch up there for as far as the eye can see from an airplane.

At Kettle, we were informed by plant management that fish (primarily pickerel) seemed to be genuinely unaffected by the existence of the hydro facility.  Long ago, I was told a joke by power engineers that “fish-friendly-hydro” is as oxymoronic as “grass-friendly-lawnmowers”.  This is probably why hydroelectricity is often ineligible to be considered “renewable” for the purposes of complying with renewable portfolio standard policies that have been enacted in many U.S. states:  many environmentalists aren’t very keen on hydro.   However, I can attest to having seen an otter and a loon both swimming in the downstream wake of the Kettle dam in waters that looked pretty turbulent — and I can only suspect that they were there at least partially for feeding purposes.

Because it is clearly zero-emission and involves a renewable resource (precipitation), and because it doesn’t cause sizable apparent negative impacts on the regional environment, I don’t see significant problems associated with more run-of-river hydro development in northern Manitoba. 

Manitoba Hydro allowed us into places and spaces for better viewing that I’m sure would have caused any OSHA  representative to faint.  The sights at Kettle were impressive, though nothing particularly rare within the power industry:  all big hydro facilities are impressive.

Just down the (gravel) road, though, was something quite extraordinary:  the Radisson Converter Station.

Conventional power grids are alternating current (AC).  Hydroelectric dams produce AC electricity.  However, shipping power across hundreds of miles of desolate landscape over AC lines is inefficient:  capital costs and losses are high, rights-of-way are wide.  In contrast, long-distance transmission using high-voltage direct current (HVDC) is much more economically-attractive on a per-mile basis.

There’s just one challenge:  converting thousands of megawatts of AC power at high-voltage to HVDC is not so easy, nor is it cheap.

Radisson is one of the largest and oldest HVDC converter stations in the world.  For as long as Kettle has been in place, Radisson has been taking its output, converting it into HVDC, and then sending it down a 400 mile set of 450 kv HVDC lines, to be reconverted into AC at a similar station (called Dorsey) in suburban Winnipeg.  Something of the magnitude of Radisson is very rare indeed.

Surrounded by switchgear and transformers akin to those found at any major substation on the power grid, a large warehouse-like building houses several sets of immense converter valves known as thyristors.  The heart of the operation, these thyristors are like transistors on steroids, chattering continuously like enormous jackhammers.  

The side-trip from Winnipeg to Gillam illustrated the basic conundrum that Manitoba faces:  all this excellent hydro resource, but it’s a thousand miles from the nearest underserved large load centers in the U.S.  While it’s relatively easy for Manitoba to increase its transmission capacity — the province can essentially assert control of rights-of-way, and population effects are minimal — getting the needed transmission expansions in the U.S. is oh-so-difficult, time-consuming and hence expensive. 

No doubt, the purpose of our visit to Manitoba was to build goodwill and generate more support as/if transmission expansion in the northern Midwest U.S. occurs to facilitate more movement of hydropower from Manitoba into the U.S.  From my standpoint, I’m in — but I also know that I alone (and my fellow travelers) will not have much incremental impact in aiding new transmission capacity to come on-line.

After about 28 whirlwind hours in Manitoba, our next stop on the Canadian tour was Alberta.  This will be the subject of a future posting, as there is even more of interest to the cleantech community to report from there.

Rethinking the Power Pole

If there’s one segment of the energy sector that you’d think might be beyond significant technological innovation, it would be power transmission poles.

And you’d be wrong!

As profiled in a recent article in The Economist a novel transmission tower design called the Wintrack pylon has been co-developed by TenneT, the operator of the Dutch electricity grid, and KEMA, a consulting and engineering firm. 

Although beauty is always in the eye of the beholder, the Wintrack  is arguably much more attractive than the traditional lattice tower structures seen maligning the landscapes of the world. 

More important than cosmetics, by virtue of the architecture of its physical design, the Wintrack produces much smaller ambient magnetic fields than what emanate from conventional transmission towers.  These magnetic fields create the buzz and static that can often be heard from high-voltage lines — and form the basis for fears (founded or otherwise) about suspected human health effects due to electromagnetic field (EMF) radiation from power lines

Between its aesthetic and magnetic benefits, the Wintrack pylon might, just might, make it incrementally a bit easier to site new transmission lines, which in turn would help alleviate grid-constrained load centers and debottleneck access to areas of abundant solar and wind energy resources that tend to be far removed from populated areas.

Hola, Tres Amigas!

by Richard T. Stuebi

Something grand is emerging on the vast dusty plains of West Texas and Eastern New Mexico.

Tres Amigas is an ambitious scheme to interconnect the three primary power grids in the U.S. — the Western grid known as WECC, the Eastern grid known as the Eastern Interconnection, and the Texas grid known as ERCOT.

As profiled in an article called “A Highway for the 21st Century” in the recent edition of Energy Biz magazine, Tres Amigas aims to incorporate high-voltage direct current (HVDC) and grid-scale energy storage technologies to enable synchronization and massive power transfer capability across the three grids — which are almost completely separated today.

Although it might seem straightforward to tie together three power grids, this is actually a very challenging technological problem.  AC to DC to AC converter stations are required at the interfaces, relying upon HVDC technologies that, while beginning to be more commonly employed, have never been deployed at the scale — 5 gigawatts initially, up to 30 gigawatts eventually — contemplated by Tres Amigas.  And, to absorb the large swings in generation provided by wind and solar projects in the Great Plains, Texas and the Desert Southwest, Tres Amigas aims to install utility-scale batteries, a still-developing area of technology.

Not surprisingly for a large and first-of-a-kind project, it’s not cheap.  Tres Amigas is forecasted to require up to $1 billion in capital.  The question will be whether the investors in Tres Amigas can make good returns. 

Presumably, the business model is based on a combination of wheeling charges (revenues from renewable energy project developers seeking to move power from source to load centers) and ancillary service fees (charges to the three grid operators to keep each of them more stable in the face of shifting supply and demand conditions).  A “merchant project” of this type and magnitude has never been tried.  No doubt, it’s a very risky bet. 

Not surprisingly, American Superconductor (NASDAQ:  AMSC), whose technologies are at the core of Tres Amigas and who would stand to benefit big-time from its success, is an investor sponsoring the development team.  It wouldn’t surprise me to see the battery supplier, when chosen, also joining the mix.

The upside of Tres Amigas to renewable energy interests is big.  If the project is completed, works well, and remains financially solvent, it will debottleneck many limits to adding further wind and solar projects in the Southwestern U.S.  There’s plenty of sun and wind out there, but the constraining factor in tapping it has been the ability of the power grid to cope with the inherent fluctuations in power output. 

With its energy storage capability and linkage across three grids, Tres Amigas would be big and bold enough to enable many heretofore thwarted renewable project developers West of the Mississippi to effectively reach a broader spectrum of potential customers from L.A. to Dallas to St. Louis, while mitigating the operational problems — such as those at the infamous congestion point near McCamey TX — that grid operators and other skeptics use as a basis for criticizing or objecting to renewable energy development.

Gridlock Windblock

by Richard T. Stuebi

I don’t know if it’s a myth, but I’ve heard it said that a city’s suicide rates and average wind speeds are correlated. According to the claim, there may be something fundamental about human biology – perhaps within the inner ear – that makes windiness tend to drive people crazy.

Whether it’s true or not, it’s indisputable that, where there’s lots of wind, there tends to be few people. And, vice versa: where there’s a lot of people, there tends to be little wind.

A casual look at a U.S. wind map confirms this: most of the best wind resources are in the middle of the country, from West Texas in the South to the Dakotas in the North. If you’ve ever driven in any of these parts, you know that this is an endless expanse of desolate, sparsely-populated land.

Unsurprisingly, it’s also the case that, where there are few people, there tend to be few electric transmission lines. Logically, it follows then that there is little electric transmission capacity in the places where wind resources are greatest.

So, when parts of the Great Plains get touted as the “Saudi Arabia of wind”, it may be true, but imagine the need to build a big set of pipelines to get that useful wind energy to customers in Minneapolis, Chicago and points further East and South.

Ask any wind developer about their business prospects, and it doesn’t take long for the conversation to turn to transmission – or, more precisely, the lack of enough of it.

Look at the study “20% Wind Energy by 2030” released in 2008 by the U.S. Department of Energy to envision the implications of supplying 20% of the nation’s electricity needs by 2030 from wind. Oh, there’s plenty of wind to actually supply the electricity, no problem. It’s just that tons of new transmission capacity would be needed.

And there’s the rub. It’s only marginally easier to site and build a new transmission line than a new nuclear powerplant. Transmission lines take many years and sometimes even decades to get done, due to a variety of NIMBY forces and overlapping regulatory regimes at the local, state and federal levels. And, they cost a fortune, easily a million dollars a mile, often considerably more.

So, that “pipeline” from Dakota to Chicago is on the order of a billion dollars of merely enabling infrastructure – and since there are many pinchpoints in the national power grid, that wind power probably couldn’t go much further than the terminating point anyway.

(From a technical standpoint, I’m massively oversimplifying here by comparing the power grid to a commodity pipeline, but the gist of the conclusion is essentially sound.)

Last year, most of the transmission grid operators from the Eastern half of the U.S. convened for the first time (that’s scary, isn’t it?) to develop what has come to be called the Joint Coordinated System Plan (JCSP) 2008. The JCSP report suggests that 10,000 new miles of transmission lines, at an investment of about $50 billion, will be needed east of the Rocky Mountains over the next 15 years just to meet expected load growth and current renewable portfolio standards on the books. Little of this required expansion is much beyond the drawing board.

The JCSP’s 20% wind scenario is even more daunting: 15,000 miles and $80 billion of capital. The map associated with this scenario is especially intriguing, with three major new hypothetical 800 kV DC corridors drawn right across Northeast Ohio to New York City. (No doubt, the nightmare of the August 2003 Northeastern blackout still sends nightmares through these transmission planners.)

Sorry, I just don’t see this happening in my lifetime.

In passing, the authors point out that neither energy efficiency nor offshore wind resources were investigated to alleviate these transmission requirements. My guess is that inclusion of these possibilities would change the results – a lot.

Significant penetration of energy efficiency could probably seriously reduce the quantity of new wind generation required to make up 20% of the region’s supply. Instead of nearly 230 gigawatts (!) of projected new wind capacity in the Eastern U.S. by 2024, my guess is that concerted exploitation of cost-effective energy efficiency opportunities could cut that investment requirement in half.

As for the 100+ gigawatts of new wind turbines in the Eastern U.S., it might be cheaper overall to put higher-cost installations offshore in the Great Lakes and in the Atlantic to avoid facing the perhaps impossible prospect of building lots of expensive new transmission lines to import onshore wind from the Great Plains.

The inability to expand transmission is a major impediment to the onshore wind business, and while it might be mitigated (slightly) with some regulatory reform, I don’t see it going away. Offshore wind may have its own development challenges, but for those in the wind industry, going offshore should become an increasingly interesting way to skirt the gridlock problem.

Richard T. Stuebi is the Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc. Later in 2009, he will also become a Managing Director of Early Stage Partners.

Blackout + 5

by Richard T. Stuebi

Over the weekend, an article in The Plain-Dealer reminded me that it has been five years ago since the infamous blackout that sent much of the Northeast U.S. and Ontario into the dark for a day or two.

Once the power was restored to everyone, U.S. and Canadian authorities quickly commissioned a Power System Outage Task Force, whose April 2004 report conclusively identified the root causes of the outage: a sequence of generation and transmission outages on a hot summer day at facilities owned and operated by First Energy (NYSE: FE) in Northeast Ohio.

At the time, pundits decried that the electric utility industry must make major changes — technologically and institutionally — to bring it from an early 20th Century analog design to the requirements of the 21st Century digital economy. Installed in an era without computers and before demands for inter-regional shipments of large quantities of power, the grid had not kept pace and was showing signs of inadequacy.

Calls became increasingly vocal for the adoption of a “smart grid” that would both improve power quality and increase the economic efficiency of the grid, by facilitating the widespread adoption of faster electric transmission and distribution switching and control systems, distributed generation devices (such as fuel cells and solar photovoltaics) and demand-reduction approaches (such as demand-response programs).

Calls also escalated for greater real-time coordination between the organizations operating neighboring power grids. The Federal Energy Regulatory Commission (FERC), which has jurisdiction over high-voltage transmission in the U.S., accelerated their efforts (albeit with limited powers to do so) to encourage utilities to adopt regional transmission organizations (RTOs).

Five years on, there has been some progress — but not nearly enough. RTOs now pretty much cover the country, but by and large they remain untested under crisis conditions, so it is unclear how effective they will operate in a crunch. Distributed generation remains a rarity, as the vast majority of power supplied to the grid still comes from central-station powerplants. Smart-grid technologies have not moved far off of the drawing-board — though Xcel Energy (NYSE: XEL) has recently announced a major pilot program for Boulder, Colorado.

Will we see another major power outage in the U.S. in the next decade? I’d bet on it. Bear in mind that the North American Electric Reliability Council (NERC) projects declining “reserve margins” — the amount of generating capacity over and above peak demands — in most parts of the country in the coming years.

Why? Due to uncertainties about future fuel prices, powerplant construction costs, regulatory rules for recovering generation investments, and new environmental requirements (especially carbon legislation), suppliers are reluctant to add new generating capacity, as they doubt their ability to earn attractive returns on major capital outlays. Meanwhile, economic growth (with only weak emphasis on energy efficiency and conservation) is driving ever-rising demand levels.

From this, I derive a simple formula: shrinking generation reserve margins + a slow move to the smart grid = future outages.

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.

The Other Solar Energy

by Richard T. Stuebi

Ten days ago, I attended a one-day symposium on climate change solutions at Oberlin College. Speaking at the symposium was John O’Donnell of Ausra.

Ausra is a leading player in the field of concentrating solar power (CSP), which utilizes mirrors to focus sunlight on a heating element containing a fluid to produce a steam that drives a turbine to generate electricity. In other words, solar thermal electricity – a field that was highly active in the 1980’s only to experience a 15+ year hiatus – is now coming back with a vengeance. Ausra claims that its CSP technology will soon be able to enable electricity production (in sunny desert climates, such as the southwestern U.S.) for about 8-10 cents/kwh.

Moreover, Mr. O’Donnell discussed how Ausra was working on integrating its CSP generation technology with thermal energy storage approaches, so that Ausra’s powerplants would be able to produce electricity not just when the sun is high in the sky — from 7 am to 6 pm — but over a time window more closely aligned to utility peak loads, which stretch from about 10 am to 8 pm. He made the interesting observation that thermal energy storage, using oils and molten salts, is many times more efficient and cost-effective than large-scale energy storage with batteries.

With all of the hype (much of which deserved) for solar photovoltaics (PV), it’s easy to forget about solar thermal approaches, and CSP particularly. Although not as universally applicable as PV, CSP can make a big dent in national energy supply, exploiting only a relatively small fraction of otherwise unusable desert land. In many cases, the gating factor for CSP deployment — just as has been the case for wind energy — will be the availability (or lack thereof) of transmission capacity to electricity load centers.

Mr. O’Donnell made the point that building roads in the U.S. was a local phenomenon subject to a patchwork of regulations and constraints — until President Eisenhower broke down the barriers with the creation of the Interstate Highway System in the 1950’s. He further noted that high-voltage DC technologies now readily available — such as those offered by ABB (NYSE: ABB) — could transmit large blocks of power across the whole continent with losses of only about 11% (excluding the conversion facilities at each terminal).

We in the cleantech community haven’t talked much about it, instead focusing on the sexy/cool generation/storage/consumption technologies, but maybe it’s time to ratchet the discussion about the so-called “smart grid” up to another level.

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.

Edison International Says Solar is the Great Untapped Resource

Cleantech Blog had a conversation last year with Stuart Hemphill, now the newly appointed Vice President for Renewables and Alternative Energy at Southern California Edison, a subsidiary of Edison International (NYSE:EIX), one of the largest purchasers of renewable power in the US. We caught up with him again today in a lively discussion around his predictions for the renewable sector.

Today they are announcing their sixth competitive solicitation for renewable energy. On peak delivery from the Tehachapi region is preferred, as they are currently building a massive transmission line to tap into the 4,500 MW of wind potential. But wind produces only 35% of the time. This major pipeline needs to be balanced. So they are looking for creative proposals from developers to fill up the rest of that transmission line with on peak power deliveries.

Renewable and alternative energy are still top goals for Edison. Stuart says his promotion is part a reflection of the business’ expanding interest in leadership in renewables in the US.

Prediction Number 1 – The next 10 years are going to be a wild, wild west in the solar industry. Companies around the globe are exploring new solar technologies of every variety. Stuart thinks it’s way too early to tell which ones are going to be successful. But he considers solar to be the great untapped resource in California and elsewhere.

So I asked him if by that he meant solar thermal or photovoltaics. The answer is “Yes”. Stuart responded that in the past couple of years we have seen incredible amounts of venture capital investment going into solar firms, and PV is only part of that equation.

When I pushed Stuart to predict a winner between conventional solar parabolic trough and other types of solar thermal technologies, Stuart refused, suggesting that it is still too early to tell which technologies will be the winners. That’s what makes it exciting to watch, in his opinion. As an example, he stated that we are now seeing renewed interest power tower technologies with pretty high efficiencies. The challenge is to see which ones get done.

When it comes to what’s important to SoCal Edison itself, it is really important that they sign PPA contracts with viable companies and viable technologies. He sees a wide spectrum of proposals in terms of viability, and is always looking for at least some sort of demonstration plant to prove it up and a significant level of backing for the companies before they can get involved.

Prediction Number 2 – I did ask him what his take on run of river hydro is. He responded that he hopes to be wrong, as he likes run of river hydro, but doesn’t see any major increases in the resource coming in California. Hydro in California in general has a very a limited resource potential left to be developed and lots of stakeholder concerns to be addressed in each case, so while he is hopeful, he is not predicting any great increases.

Prediction Number 3 – US Offshore Wind – We will not see much from offshore wind in California, as the limitations both from physical layout of shoreline as well as policy and consumer concerns.

We then switched to what the industry challenges are. Stuart nailed two big ones, transmission and interconnection.

He believes that transmission is getting even more challenging than last time we spoke. What’s interesting to Stuart is that most people agree and are in support of renewables in California, but very few people support the way that the goals need to be attained, ie, significantly increase transmission infrastructure. There tends to be lots of local opposition, or federal agencies that aren’t always in support of particular local goals. This makes sense, as transmission by its nature always touches a lot of different land and communities in its path, meaning lots of different stakeholders need to be involved.

Interconnection queue bottlenecks are the real next challenge in California and in the Midwest according to Stuart. This is a challenge that is addressable and there are proposals into FERC to do so. But currently it is a first come first serve system, and easy to get into the queue. Getting in the queue starts a study process based on FERC rules, including a feasibility study, then a system impact study and a facility study. The bottleneck arises because according to the current rules, if your facility is further back in the queue, your studies assume that the facilities ahead of you are up and running, but if at any point in time someone ahead of you drops out, your studies need to be effectively redone. Because it is relatively easy to get into the queue, nonviable projects that do not end up coming online as planned have been upsetting the applecart, causing all the projects behind them to go back to the drawing board as far as the study process is concerned. Since 2002, we’ve seen a steep ramp up to a level that is just unmanageable given that dynamic. CAL ISO has a proposal in with FERC to change this, so Stuart believes a solution is coming, just not here yet.

As usual, SoCal Edison is pushing forward aggressively on renewables, and we were excited to see the new solicitation and changes they are making. As we have said before, let’s just get it done.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, Chairman of Cleantech.org, and a blogger for CNET’s Cleantech blog.